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31 Cards in this Set
- Front
- Back
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economics
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the study of the way people organize themselves to sustain life and enhance its quality
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positive questions
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questions about how things are
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normative questions
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questions about how things should be
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wealth
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whatever confers the ability to produce and procure valued goods and services
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efficiency
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the use of resources in a way that does not involve any waste
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economic actor
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an individual, group or organization that is involved in the economic activities of resource maintenance, production, etc.
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negative externalities
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harmful side effects of economic activity that affect persons or entities that are not among the economic actors directly responsible for the activity
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positive externalities
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beneficial side effects of economic activity that accrue largely to persons or entities that are not among the economic actors directly involved in the activity
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transition costs
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costs of arranging economic activities
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resource maintenance
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the management of resources so their productivity is sustained
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production
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the conversion of resources into goods and services
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distribution
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sharing of products and resources among people
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exchange
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the trading of one thing for another
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transfer
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giving of something with nothing expected in return
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consumption
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the final use of a good or service
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abundance
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resources exist in plentiful supply for meeting various goals
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scarcity
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resources are not sufficient to allow all goods to be accomplished at once
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production possibilities frontier
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a curve showing the max amounts of two outputs that society could produce from given resources and time
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opportunity cost
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the value of the best alternative that is foregone when a choice is made
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technological progress
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the development of new methods of converting inputs to outputs
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core sphere
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households, families and communities
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public purpose sphere
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government and other local, national and international organizations established for some public purpose beyond individual or family self-interest and operating not for profit
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public good
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goods for which use by one person doesn't diminish usefulness to others. Difficult to exclude anyone from benefiting.
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free riders
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people who would like to enjoy the benefit of a public good without paying for it
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business sphere
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firms that produce goods and services for profitable sale
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informal sphere
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business operating outside of government oversight and regulation
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microeconomics
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the sub-field of economics that focuses on activities that take place within and among the major economic organizations of a society
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macroeconomics
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the sub-field of economy that focuses on the economy as a whole
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model
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an analytical tool that highlights some aspects of reality while ignoring others
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traditional microeconomics model
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(basic neoclassical model) a simple, mechanical model that portrays the economy as a collection of profit-max firms and utility-max households interacting through perfectly competitive markets
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economistic
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thinking that confuses the assumptions of the traditional model with reality
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